Guide to Selling a Primary Care Practice in Mississippi

The market for Primary Care in Mississippi is defined by unprecedented demand, creating a unique window of opportunity for physician owners considering a sale. With a growing need for providers across the state, buyers are actively seeking to acquire established practices. However, turning this market advantage into a successful exit requires strategic preparation. Navigating the sale process to protect your legacy and maximize your financial outcome starts long before you list your practice.

Mississippi’s Primary Care Market: An Environment of Opportunity

If you are a primary care physician in Mississippi, you already know the demand for your services is high. This clinical reality translates directly into a strong business environment for practice owners looking to sell. The current market is not just stable. It is expanding.

High Patient Demand

Mississippi faces a significant primary care shortage. The state has only 67.4 active primary care physicians per 100,000 people, well below the U.S. median of 94.7. With a population-to-physician ratio of 1,860-to-1, the need is clear. Projections show the state will require over 360 additional primary care physicians by 2030. For a practice owner, this shortage means your established patient base and community presence are highly valuable assets to potential buyers.

A Growing, Resilient Market

This demand fuels financial growth. The primary care sector in Mississippi is on track to become a $2 billion industry by 2025. Buyers, including health systems and private equity groups, see this as a sign of a resilient and profitable market. They are not just buying a practice. They are investing in a region with a clear, long-term need for healthcare services.

3 Key Considerations Before You Sell

A strong market is a great starting point. But a successful sale depends on careful planning around a few key areas. Here are three things we advise owners in Mississippi to think about early in the process.

1. Define What “Success” Looks Like for You. Is your top priority the highest possible price? Or is it ensuring your patients and staff are left in good hands with a buyer who shares your values? Perhaps you want to continue practicing for a few years post-sale. Defining your personal and financial goals is the first step. The right buyer for a quick, high-multiple cash-out is different from the right partner for a transition that preserves your legacy.

2. Understand Who the Buyers Are. The buyers in today’s market range from local hospitals to national private equity-backed groups. Each has different goals and operational models. A hospital may be focused on building its referral network, while a private equity group might be focused on streamlining operations to improve profitability. Knowing their motivations helps you position your practice’s strengths and negotiate effectively.

3. Prepare for a Marathon, Not a Sprint. One of the most common M&A objections we hear is,
   Im not ready to sell for 2-3 years. That is the perfect time to start preparing. Buyers pay for proven performance, not future potential. Using this time to clean up financials, optimize billing, and document processes can significantly increase your practices value when you are ready to sell.

How Market Activity Shapes Your Opportunity

The demand for primary care in Mississippi isn’t just coming from traditional buyers like hospitals. A major trend shaping the M&A landscape is the increasing activity of private equity firms and other sophisticated investors.

The Rise of New Buyers

Private equity investment in physician practices has grown significantly nationwide, and Mississippi is part of this trend. These groups are actively looking for well-run primary care practices to serve as “platforms” for future growth or as additions to their existing healthcare networks. They bring capital and business expertise, but they also bring a different approach to deal-making than a local health system might.

What This Means for You

This activity is good news for sellers. It creates more competition for practices like yours, which can lead to higher valuations and more flexible deal structures. However, it also means you may be negotiating with a team of experienced M&A professionals. Understanding how they value a practice, what they look for during due diligence, and how they structure deals is critical to leveling the playing field and securing the best terms. Timing your entry into the market to align with these trends can make a substantial difference.

A Look Inside the Sale Process

Selling your practice is a structured journey with distinct phases. While every deal is unique, the overall path follows a predictable sequence. Understanding these steps helps demystify the process and highlights where preparation is most important. Many sales encounter trouble during due diligence, but most of those issues could have been prevented with proper planning from the start.

How Is a Primary Care Practice Valued?

Understanding your practice’s value is the foundation of any sale strategy. While many factors play a role, buyers today focus on two key components: your practice’s true cash flow and a valuation multiple based on its risk and growth profile.

It Starts with Adjusted EBITDA

Sophisticated buyers look past the net income on your tax return. They want to see your Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This figure represents the real, ongoing cash flow of the business. To calculate it, we start with your net income and add back things like taxes, interest, and any personal expenses run through the practice (like a car lease or excess owner salary). This gives a true picture of profitability.

The All-Important Multiple

This Adjusted EBITDA figure is then multiplied by a number (the “multiple”) to determine the practice’s enterprise value. For primary care, this multiple can range from 3.0x to over 7.0x. The exact number depends on factors like:
* Your number of providers (solo-doctor practices have lower multiples).
* Your payer mix and revenue stability.
* Your geographic location and growth potential.

This is why a simple “rule ofthumb” is often misleading. The right advisor doesnt just do the math. They frame the story of your practice to justify the highest possible multiple.

Planning for Life After the Sale

The day you close the deal is not the end of the journey. A well-structured sale includes a clear plan for what comes next for you, your finances, and your career. Thinking about these elements during negotiations is key to a smooth transition.

1. Your Future Role. Many buyers, especially private equity groups, want the physician owner to stay on for a period of 1 to 3 years. This provides continuity for patients and staff. Negotiating the terms of your employment agreementincluding your compensation, responsibilities, and clinical autonomyis a critical part of the overall deal.

2. Structuring Your Payout. Not all of the purchase price may be paid in cash at closing. Deals often include an “earnout,” where you receive additional payments if the practice hits certain performance targets post-sale. Another common structure is “rollover equity,” where you “roll” a portion of your sale proceeds into ownership of the new, larger company. This gives you a potential second financial win when that larger entity is sold years later.

3. Protecting Your Proceeds. The structure of your sale has major tax implications. An asset sale is taxed differently than a stock sale. How you handle rollover equity and earnouts also impacts your bottom line. Getting expert advice on a tax-efficient sale structure can save you a significant amount of money.